UK is moving away from corporation tax, says ACCA

United Kingdom 15 May 2013

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We have long been calling for greater regulation of tax advice. While ACCA and other accountancy bodies have strict regulation and standards, anyone can set up and offer tax advice without those safeguards in place

—Chas Roy-Chowdhury, head of taxation,ACCA

The UK is moving away from corporation tax and securing revenue from companies through alternative means, ACCA (the Association of Chartered Certified Accountants) has told Parliament

In evidence to the House of Lords Select Committee on Economic Affairs, ACCA pointed out that HM Revenue and Customs was working with businesses in a 'quick and effective manner' to ensure taxes were collected.

Chas Roy-Chowdhury, ACCA head of taxation, said: 'We need to look at the bigger picture when it comes to how corporations are taxed in the UK. There are alternative ways by which companies in the UK are taxed, for example through VAT.'

Speaking after giving evidence to the House of Lords, Chas Roy-Chowdhury said that the fundamental problem is that large companies are by nature multinational – their shareholders, activities and customers are spread across the world – whilst national governments are not.

Chas Roy-Chowdhury added: 'There is a tax chasm between what governments seek to capture by way of corporation tax and what companies, many of which are global in terms of their shareholders, activities and customers, generate in terms of global profits. In practice, existing rules are highly complex and differences between countries can be exploited well within the law. HMRC has adapted to this and is not sitting on its laurels as some other Parliamentary committees have suggested. They are quick and effective and have developed a greater understanding of how companies work. The majority of corporations go through the tax process with ease. HMRC has achieved this despite declining resources.'

Name and shame

House of Lords Select Committee on Economic Affairs raised the issue of naming and shaming those who have promoted failed tax avoidance scheme. Chas Roy-Chowdhury said: 'If naming and shaming is going to be introduced, the bar needs to be set very high. The complexity of the tax system means there is a risk that mis-interpretation could result in naming and shaming of an adviser, which is a severe punishment.

'We have long been calling for greater regulation of tax advice. While ACCA and other accountancy bodies have strict regulation and standards, anyone can set up and offer tax advice without those safeguards in place.'